New Hampshire might cut back health insurance premiums

With cost of healthcare services on the rise, be it inpatient treatment to drug prices, customers will continue to see higher expenses in the coming years. (Image: iStock)

Earlier this year, the cost of the second-cheapest silver plan increased by 78% over the 2017 rate based on analysis performed for the New Hampshire Insurance Department, presented at Tuesday’s annual hearing. This plan is now expected to cost 15% less.

The increase was likely caused by a number of factors such as the elimination of federal payments to help offset risk and closure of a Massachusetts insurer that had offered low-cost plans in New Hampshire.

With cost of healthcare services on the rise, be it inpatient treatment to drug prices, customers will continue to see higher expenses in the coming years.
According to Union Leader, the New Hampshire insurance plans have had lower premiums than most other states over the past several years partially because the deductibles for those plans being higher than in other states. Local customers pay less out-of-pocket on a monthly basis but more when they actually require healthcare services.

A significant change has been the closure of Minuteman Health by the end of 2018, which resulted in nearly 25,000 members dropping their health coverage after plans were not rolled out. Minuteman had provided lower-cost plans to a comparatively healthy portion of New Hampshire’s individual insurance marketplace, so its exit could cause rates elsewhere to go up, said Jenn Smagula of Gorman Actuarial, which prepared the 2018 cost and rate trends report for the NHID.

“Given the number of members that have dropped coverage so far in 2018, it is expected that this will affect the overall insurance rate,” she said, adding, “It is expected that this is going to play out in higher cost trends.”
Healthier people pay more to insurers than they receive back as reimbursement for services, but they are less likely to purchase insurance in the first place and when they leave the marketplace the remaining pool of people is less healthy and therefore more expensive to insure, which can cause rates to go up. Currently, thousands of people who became insured as a result of Medicaid expansion are part of that pool because they get their plans through the state’s individual marketplace, where those who don’t receive insurance from their employer or federal programs like Medicare and Medicaid shop for plans.

Beginning in January, that population will be transitioned onto the state’s new Medicaid Care Management Program, where they will select from plans provided by one of two companies. Barring major policy changes in Washington, D.C., it seems unlikely that New Hampshire customers will soon see price hikes as dramatic as they did from 2017 to 2018.

“We continue to see increases in premiums and reductions in the value of health insurance benefits (often referred to as ‘buy down’), but also some positive findings that show greater stability than over the last few years, especially in the individual market,” Tyler Brannen, the NHID’s director of health economics, wrote in an email.

“However, there is a lot of uncertainty with the federal influence on all markets.”